Inside the gambling bill

Illinois legislators, Mayor Rahm Emanuel and others eager for new tax revenues are pressuring Gov. Pat Quinn to support the huge expansion of casino gambling that has cleared the General Assembly.

Quinn has criticized the bill as excessive but hasn't said whether he will sign it; Senate President John Cullerton, fearful of a veto, hasn't even sent it to the governor. Quinn has, though, said he will protect the integrity — and thus the existing revenues — of Illinois gambling.

The Chicago Crime Commission says the bill, if it becomes law, "will lead to political corruption and crime syndicate infiltration." But proponents have spent months peddling assurances that such concerns are largely resolved in the legislation itself. They're fond of asking doubters, "Have you read all 400 pages?"

Until now, the legal authorities most steeped in the intricacies of regulating Illinois gambling haven't offered a detailed response. But a previously undisclosed memo prepared by lawyers for the Illinois Gaming Board directly rebuts the just-trust-us nostrums of the proponents.

Neither the Gaming Board nor its lawyers publicly released the memo. A source independent of the board and the agency gave a copy to the Tribune editorial board. Today we synthesize the proponents' assurances — and the regulators' dissection of the bill's serious gaps.

As you read, ask why the bill's architects would go to such lengths not to capitalize on the Gaming Board's experience, but instead to create a redundant oversight body for a casino in Chicago.

Ask why lawmakers would want that casino excluded from the precise scrutiny that, for two decades, the Gaming Board has enforced at every Illinois casino.

Ask, too, whether you trust Chicago's City Hall — not just under today's mayor, but under future mayors — to run a casino with the highest ethical standards.

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The bill's proponents say control of a Chicago casino by a newly created Chicago Casino Development Authority, with a board and executive director appointed by Chicago's mayor, isn't a troubling shift from how other Illinois casinos operate.

• The Gaming Board attorneys' memo warns of a regulatory muddle in which two powerful state and city governments share jurisdiction over gambling. The inevitable conflicting opinions of state and city regulators will create "confusion and gaps in enforcement, and an opportunity for unsavory elements to gain a foothold in Illinois gaming."

• The procedures for awarding a Chicago license "are entirely different from those of any other casino in Illinois, and from any other casino in the world." One provision: Under this bill, the Gaming Board must issue the Chicago license. That is, "(The board) does not have the discretion to reject (the licensee) as it does with other owners license applications."

• Unstated but implied: No matter how shaky or subject to improper influences Chicago's authority looks, the board can't deny it a license. What's more, the memo says, "The term of the Chicago license will be perpetual, contrasting with the four-year maximum license issuance (with the possibility of renewals) to other Illinois casinos. … (The Chicago license is) impossible for the Gaming Board to suspend or revoke. Thus, the Illinois Gaming Board has little regulatory power over the license."

• Chicago's mayor and casino authority would choose board members and managers. The Gaming Board could disapprove. But that's not the case for some areas where illicit political clout or organized crime influence can intrude: "Contract approvals, and all casino operations and functions outside of gaming (such as contracts, construction, restaurants, shops, maintenance and hotel facilities) reside entirely with the Chicago authority, despite the Illinois Gaming Board's extensive experience in overseeing these activities as they relate to gaming facilities."

In other words: Those past instances where Gaming Board investigators have intercepted mob intrusion attempts to provide services at Illinois casinos? Forget it. At this casino, Chicago would … regulate itself.

• "Since there is a conflict in rule-making, it is unclear whether the rules of the Illinois Gaming Board or Chicago Casino Development Authority will prevail. … The overall result is a shared state-local regulatory scheme of labyrinthine complexity. It creates a new agency with broad investigative and duplicative regulatory powers to those that already exist at the Illinois Gaming Board." And although "the Gaming Board makes extensive use of the Illinois State Police in performing its duties," this bill "specifically forbids the new authority from utilizing the Illinois State Police."

The bill's advocates say the Gaming Board could vet investors and other key players in new facilities associated with a Chicago casino. And open-bidding requirements for contracts of more than $25,000 assure transparency.